Changing times in the retail sector have presented some daunting challenges for commercial property owners. Thanks to the Internet, today's retail consumers no longer need to make multiple trips to the mall to browse and compare prices. In fact, 85 percent of Americans participate in web-rooming, or researching a product beforehand on devices such as smartphones, tablets and laptops. Yet more than 90 percent of transactions are still made in a physical store, proving that the allure of online shopping cannot replace the value of a quality brick-and-mortar experience.
In this new environment, a mall's measurement of success can no longer hinge on the number of people that walk through the door. Instead, property owners and retailers need to work together to understand consumer shopping patterns both in the mall and individual retail locations. Armed with this information, they can collectively develop a merged channel strategy that taps into the Internet while still celebrating the brick-and-mortar purchasing experience.
A Collaborative Relationship Provides Deeper Knowledge
A critical component to helping mall owners understand their properties is realizing how technology and data analysis can assist them in seeing beyond foot traffic to develop a more comprehensive look at consumer behavior. There are also significant benefits when property owners and retailers work collaboratively, pooling data so they can reach mutually beneficial decisions about store locations, marketing programs, staffing and lease negotiations.
Foot traffic on its own provides very important information about who comes into the mall and when. This foundational information is even more powerful when combined with other metrics being collected by both property owners and retailers. For instance, combining foot traffic data with dwell-time data shows how much time consumers are spending in a specific area, helping owners and retailers make decisions about displays, marketing programs and sales incentives. Similarly, by looking at peak shopping hours and abandonment metrics, owners and retailers can work together to develop staffing strategies. And by understanding draw rate, owners can work with retailers to develop marketing campaigns and in-mall promotions that drive traffic to specific locations.
Another key metric that both property owners and retailers can benefit from is Gross Shopping Hours (GSH), which takes into account visitor numbers and visitor dwell time both within the shopping mall and individual stores. Research has shown that the more time shoppers spend in the mall, the more likely they are to make a purchase. By understanding GSH, property owners can take the necessary actions to keep shoppers engaged, which will ultimately have a positive impact on a retailer's sales potential.
A New Way of Thinking Will Bring Positive Change
For many property owners and their employees, using technology and data to understand consumer behavior presents a new way of thinking and doing business. Similarly, the changing relationship with retailers requires a shift in mindset. By being proactive and seeking out ways to boost traffic and sales, property owners can become a driving force – optimizing sales and improving tenant relationships for a positive impact on the bottom line. A few simple steps to follow include:
• Choose the Right Technology: In today's retail environment, data drives business and malls are not exempt. To be successful, property owners need to make a commitment to obtaining reliable and consistent information by investing in the right technology solution.
• Make Data Actionable: Just collecting data is not enough. The key is taking the data and making it actionable. To do this, property owners need to take the time to become familiar with the metrics and then consider how they impact their existing Key Performance Indicators (KPI).
• Gradual Integration is Key: The successful use of data is not an overnight fix and any new programs should be gradually integrated into existing models. Over time, the data can be used to develop and introduce updated KPIs.
• Build Internal Awareness: Every level of the organization should be aware of how data can impact the mall's performance. They should also understand how to make the data actionable in their department. For instance, management needs to understand that data can help them make decisions about layout and improvement projects; sales teams can use data to develop leasing presentations and negotiate deals, and marketing can use data to make their campaigns more effective and develop in-mall promotions.
• Collaborate: It can't be stressed enough how important it is to recognize that properly used data can have a positive impact on profitability for retailers, ultimately impacting the mall bottom line. Collaboration with retailers will help property owners influence shopper behavior for a higher return.
Through the use of technology and relationship building with retailers, property owners will better understand consumer behavior so that they can more effectively respond to these new shopping patterns. Ultimately, by delivering a positive impact on retailers' bottom lines, property owners will be more successful while offering greater value to the community around them.
— Todd Starcevich holds two roles within ShopperTrak. As chief strategy officer, Starcevich is responsible for leading key drivers for business expansion and new market growth. He also heads up ShopperTrak's global mall business, where he is responsible for product development, sales and marketing, and engagement strategies for malls and shopping centers.